WARRENVILLE, Ill.--(BUSINESS WIRE)--Fuel Tech, Inc. (NASDAQ: FTEK), a technology company providing advanced engineering solutions for the optimization of combustion systems, emissions control, and water treatment in utility and industrial applications, today reported financial results for the second quarter ended June 30, 2021 (“Q2 2021”).

“Our Q2 2021 revenues rose 18.6% from the second quarter of 2020 (“Q2 2020”), driven by a 72% revenue improvement for the FUEL CHEM^® segment attributable to contributions from recent installations of our TIFI^® Targeted In-Furnace Injection technology on new domestic accounts, increased demand for power, and the ongoing recovery from the COVID-19 pandemic,” said Vincent J. Arnone, President and CEO. “We believe that our FUEL CHEM business segment will continue to produce strong results for the balance of 2021, with upside potential derived from application opportunities in the U.S. and internationally.

“Our Air Pollution Control (APC) business remained challenged in Q2 2021 due to ongoing pandemic-driven project delays and cancellations that have resulted in a lack of new orders, and project timing. We were pleased to recently announce $4.5 million in new contracts from customers in Korea, North America, and Europe, and view this as a reflection of a strengthening post-COVID business procurement environment. We believe that our greatest opportunities lie in industrial applications, led by our Selective Catalytic Reduction (SCR) and ULTRA^® technologies, and we continue to pursue a current global sales pipeline of $40-50 million.”

Mr. Arnone continued, “During Q2 2021, we completed on-site demonstrations of our Dissolved Gas Infusion (DGI^TM) at two locations in the United States – the first at a pulp and paper facility in the Northwest that is looking to increase its production capacity later this year, and the second at a municipal wastewater treatment facility on the west coast that was intended to show the benefits of supplemental oxygenation that could be provided by DGI during periods of high waste treatment volume for the municipality. These incremental, yet important demonstrations proved the efficacy of our advanced aeration technology as an adjunct to existing wastewater treatment processes at the facilities.”

He concluded, “We ended the second quarter with a strong balance sheet and have no debt. We are well-positioned to pursue a variety of business development growth initiatives and continue to monitor proposed federal infrastructure spending related to the reduction of harmful emissions.”

Q2 2021 Consolidated Results Overview

Consolidated revenues for the quarter increased 18.6% to $5.2 million from $4.4 million in Q2 2020, reflecting higher revenues for FUEL CHEM offset by revenue declines in the APC segment.

Gross margin for Q2 2021 was 49.5% of revenues compared to 13.7% of revenues in Q2 2020. Gross margin in Q2 2020 included a $1.1 million charge for an APC product warranty issue; excluding this charge, consolidated gross margin for Q2 2020 was 40%.

SG&A expenses rose to $3.0 million from $2.8 million in Q2 2020, reflecting higher administrative and employee expenses, offset by a reversal of a $0.5 million charge to the allowance for doubtful accounts recorded in Q2 2020.

Operating loss narrowed to $(0.7) million from an operating loss of $(2.4) million in Q2 2020.

Net loss narrowed to $(0.8) million, or $(0.03) per share, compared to a net loss of $(2.5) million, or $(0.10) per share, in Q2 2020.

Consolidated APC segment backlog at June 30, 2021 was $4.9 million compared to $5.3 million at December 31, 2020. Backlog at June 30, 2021 included $4.6 million of domestic backlog as compared to $4.9 million of domestic backlog at December 31, 2020. Backlog at June 30, 2021 did not include $4.5 million in new contracts from customers in Korea, North America, and Europe awarded in July 2021.

APC segment revenues declined to $1.0 million in Q2 2021 from $1.9 million in Q2 2020, primarily the result of delayed projects related to the COVID-19 pandemic. APC gross margin in Q2 2021 was $0.5 million, or 48.6% of revenue, compared to gross margin of $(0.4) million in Q2 2020 that included the above-referenced $1.1 million charge. Excluding the charge, APC gross margin for Q2 2020 was $0.7 million, or 39%.

FUEL CHEM segment revenues rose to $4.2 million, up 71.8% from $2.4 million in Q2 2020. This increase primarily reflected higher power demand and recovery from the initial emergence of the COVID-19 pandemic, which impacted results in the prior year period. Segment gross margin improved to 49.7% in Q2 2021 from 40.0% in Q1 2020.

Adjusted EBITDA loss for the quarter was $(0.6) million in Q2 2021 compared to an Adjusted EBITDA loss of $(2.2) million in Q2 2020.

Financial Condition

At June 30, 2021, cash and cash equivalents were $36.6 million and restricted cash was $0.4 million. Stockholders’ Equity at June 30, 2021 was $45.9 million, or $1.52 per share, and the Company had no debt.

Conference Call

Management will host a conference call on Wednesday, August 11, 2021 at 10:00 am EDT / 9:00 am CDT to discuss the results and business activities. Interested parties may participate in the call by dialing:

• (877) 423-9820 (Domestic) or
• (201) 493-6749 (International)

The conference call will also be accessible via the Upcoming Events section of the Company’s web site at www.ftek.com. Following management’s opening remarks, there will be a question-and-answer session. Questions may be asked during the live call, or alternatively, you may e-mail questions in advance to This email address is being protected from spambots. You need JavaScript enabled to view it.. For those who cannot listen to the live broadcast, an online replay will be available at www.ftek.com.

About Fuel Tech

Fuel Tech develops and commercializes state-of-the-art proprietary technologies for air pollution control, process optimization, water treatment, and advanced engineering services. These technologies enable customers to operate in a cost-effective and environmentally sustainable manner. Fuel Tech is a leader in nitrogen oxide (NO_x) reduction and particulate control technologies and its solutions have been in installed on over 1,200 utility, industrial and municipal units worldwide. The Company’s FUEL CHEM^® technology improves the efficiency, reliability, fuel flexibility, boiler heat rate, and environmental status of combustion units by controlling slagging, fouling, corrosion and opacity. Water treatment technologies include DGI™ Dissolved Gas Infusion Systems which utilize a patented nozzle to deliver supersaturated oxygen solutions and other gas-water combinations to target process applications or environmental issues. This infusion process has a variety of applications in the water and wastewater industries, including remediation, aeration, biological treatment and wastewater odor management. Many of Fuel Tech’s products and services rely heavily on the Company’s exceptional Computational Fluid Dynamics modeling capabilities, which are enhanced by internally developed, high-end visualization software. For more information, visit Fuel Tech’s web site at www.ftek.com.

NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release contains “forward-looking statements” as defined in Section 21E of the Securities Exchange Act of 1934, as amended, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and reflect Fuel Tech’s current expectations regarding future growth, results of operations, cash flows, performance and business prospects, and opportunities, as well as assumptions made by, and information currently available to, our management. Fuel Tech has tried to identify forward-looking statements by using words such as “anticipate,” “believe,” “plan,” “expect,” “estimate,” “intend,” “will,” and similar expressions, but these words are not the exclusive means of identifying forward-looking statements. These statements are based on information currently available to Fuel Tech and are subject to various risks, uncertainties, and other factors, including, but not limited to, those discussed in Fuel Tech’s Annual Report on Form 10-K in Item 1A under the caption “Risk Factors,” and subsequent filings under the Securities Exchange Act of 1934, as amended, which could cause Fuel Tech’s actual growth, results of operations, financial condition, cash flows, performance and business prospects and opportunities to differ materially from those expressed in, or implied by, these statements. Fuel Tech undertakes no obligation to update such factors or to publicly announce the results of any of the forward-looking statements contained herein to reflect future events, developments, or changed circumstances or for any other reason. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including those detailed in Fuel Tech’s filings with the Securities and Exchange Commission.

FUEL TECH, INC.
GEOGRAPHIC INFORMATION
(in thousands)

Information concerning Fuel Tech’s operations by geographic area is provided below. Revenues are attributed to countries based on the location of the customer. Assets are those directly associated with operations of the geographic area.

Adjusted EBITDA

To supplement the Company's consolidated financial statements presented in accordance with generally accepted accounting principles in the United States (GAAP), the Company has provided an Adjusted EBITDA disclosure as a measure of financial performance. Adjusted EBITDA is defined as net income (loss) before interest expense, income tax expense (benefit), depreciation expense, amortization expense, stock compensation expense, and intangible assets abandonment and building impairment. The Company's reference to these non-GAAP measures should be considered in addition to results prepared in accordance with GAAP standards, but are not a substitute for, or superior to, GAAP results.

Adjusted EBITDA is provided to enhance investors' overall understanding of the Company's current financial performance and ability to generate cash flow, which we believe is a meaningful measure for our investor and analyst communities. In many cases non-GAAP financial measures are utilized by these individuals to evaluate Company performance and ultimately determine a reasonable valuation for our common stock. A reconciliation of Adjusted EBITDA to the nearest GAAP measure of net income (loss) has been included in the above financial table.

Vince Arnone
President and CEO
(630) 845-4500

Devin Sullivan
Senior Vice President
The Equity Group Inc.
(212) 836-9608

Initiative will reduce CITY Furniture’s carbon emissions by 52,000 tons

WHITE PLAINS, N.Y.--(BUSINESS WIRE)--#RNG--OPAL Fuels LLC, a vertically integrated producer and distributor of Renewable Natural Gas (RNG) for heavy-duty truck fleets, announced today a contract with CITY Furniture to build three RNG fueling stations and supply the company with 7.75 million gasoline gallon equivalent (GGE) of RNG over the terms of the agreement. TruStar Energy, an OPAL Fuels company, will manage the CNG station development, construction, and service in Miami Gardens, Ocoee, and Plant City, Florida.

“Companies operating heavy duty trucks are quickly realizing that they don’t have to wait for new, unproven technologies and infrastructure to significantly reduce their greenhouse gas emissions and save on fuel costs—RNG does that today,” said Adam Comora, Co-Chief Executive Officer of OPAL Fuels LLC. “Our partnership with CITY Furniture will reduce their carbon emissions by 52,000 tons by switching to RNG from diesel fuel.

The three new stations join CITY Furniture’s first RNG fueling station in Tamarac, Florida, which OPAL Fuels built ten years ago. The stations and RNG dispensing agreement are part of CITY Furniture’s sustainability push and Green Promise for carbon neutrality by 2040. CITY Furniture is an early leader among Florida-based firms making a time-certain pledge to achieve net zero carbon emissions.

“We made the promise to invest in a greener future and to make a substantial effort to care for our planet two years ago. Our 2040 Green Promise using CNG lowers emissions compared to diesel. Using RNG will significantly reduce emissions even further,” said Andrew Koenig, President of CITY Furniture. “There was no other option but to partner with OPAL Fuels on this venture. We make thousands of deliveries every year, so transitioning all of our trucks to RNG is a critical step in reducing our emissions.”

Following years of testing and growing use, RNG has developed into a proven, low-cost, low-carbon fuel available today. RNG is chemically identical to the natural gas Americans use to cook and heat their homes, with one critical difference: it's not a fossil fuel pumped from the ground. Instead, RNG is the natural byproduct of landfills and animal waste, captured and processed before it leaks into the atmosphere or is required to be burned off. Fleets that use RNG can reduce their total GHG by 99 to 149 percent compared to diesel, and RNG can also cost 40 to 70 percent less per gallon, providing an attractive rate of return on natural gas truck capital expenditures and a significant annual operating cost savings.

“We are proud to say our fleet is one of the greenest in the industry,” said Koenig, “and our transition to 100% RNG solidifies that. We will continue to push for a cleaner, more sustainable future partnered with OPAL Fuels.”

About OPAL Fuels LLC

OPAL Fuels LLC, a FORTISTAR portfolio company, brings together FORTISTAR Methane Group, FORTISTAR RNG, and TruStar Energy to create a vertically integrated renewable fuels platform. OPAL is an emerging leader in the production and distribution of renewable natural gas (RNG), a proven low carbon fuel with a decades-long track record of results that has the power to rapidly decarbonize the transportation industry. OPAL captures harmful methane emissions at the source and recycles the trapped energy into a commercially viable, low-cost alternative to diesel fuel. OPAL’s subsidiary company, TruStar Energy, manages all compressed natural gas (CNG) fueling station development, construction, and service. As a vertically integrated producer and distributor of RNG for heavy-duty truck fleets for over 20 years, OPAL delivers best-in-class, complete renewable solutions to customers and production partners. To learn more about OPAL and how it is leading the effort to decarbonize North America's transportation industry, please visit www.opalfuels.com.

About CITY Furniture

CITY Furniture is South Florida’s ultimate furniture and mattress store committed to providing the highest quality home furnishings at excellent values. Celebrating its 50^th year in business, CITY operates 20 showrooms from Miami through Vero Beach, and in Southwest and Central Florida, as well as 14 Ashley HomeStore showrooms as the brand’s Southeast and Southwest Florida licensee. For more information, please visit www.cityfurniture.com.

Media
Lily Thieneman
502-468-8801
This email address is being protected from spambots. You need JavaScript enabled to view it.

FORT WORTH, Texas--(BUSINESS WIRE)--Lonestar Resources US Inc. (OTCQX: LONE) (including its subsidiaries, “Lonestar,” “we,” “us,” “our” or the “Company”) today reported financial and operating results for the three months ended June 30, 2021.

HIGHLIGHTS

• Second Quarter Production Up 14% From First Quarter Levels. Lonestar reported a 14% increase in net oil and gas production to 11,855 BOE/d during the three months ended June 30, 2021 (“2Q21”), compared to 10,377 BOE/d for the three months ended March 31, 2021 (“1Q21”). Production was comprised of 73% crude oil and NGL’s on an equivalent basis. Lonestar’s development program continues to deliver significant increases in production, with July production rates averaging 13,500 BOE/d.
• Adjusted Net Income Was $10.7 Million, or $1.07 Per Share. While Lonestar reported a net loss attributable to its common stockholders of $17.8 million, or ($1.77) per share in 2Q21 compared to a net loss of $6.3 million in 1Q21, Lonestar’s adjusted net income for 2Q21 was $10.7 million, or $1.07 per share. Adjusted net income excludes, on a tax-adjusted basis, certain items that the Company does not view as either recurring or indicative of its ongoing financial performance. Most notable among these items include: a $29.1 million unrealized hedging loss on financial derivatives (“mark-to-market”). Please see Non-GAAP Financial Measures at the end of this release for the definition of Adjusted Net Income (Loss), a reconciliation of net loss before taxes to Adjusted Net Income (Loss), and the reasons for its use.
• Lonestar Reported 2Q21 Adjusted EBITDAX of $23.7 Million. 2Q21 Adjusted EBITDAX increased 3% over 1Q21 adjusted EBITDAX of $22.9 million. Improved wellhead price realizations and reduced cash expenses positively impacted 2Q21 results. However, 2Q21’s Adjusted EBITDAX was negatively impacted by $10.8 million of hedge losses realized in the quarter while 1Q21’s result were negatively impacted by $5.4 million of realized hedge loss. Please see Non-GAAP Financial Measures at the end of this release for the definition of Adjusted EBITDAX, a reconciliation of net loss attributable to common stockholders to Adjusted EBITDAX, and the reasons for its use.
• Lonestar Reported Discretionary Cash Flow For 2Q21 of $19.9 Million. Lonestar’s Discretionary Cash Flow of $19.9 million for the three months ended June 30, 2021, which is a 4% increase over $19.1 million generated in the three months ended March 31, 2021. Lonestar spent $38.4 million on capital expenditures in the six months ended June 30, 2021. Please see Non-GAAP Financial Measures at the end of this release for the definition of Discretionary Cash Flow, a reconciliation of net loss attributable to common stockholders to Free Cash Flow, and the reasons for its use.

Lonestar’s Chief Executive Officer, Frank D. Bracken, III commented, “Our 2021 capital program continues to generate robust growth in production and cash flow, and the front-end loaded nature of that program is expected to yield significant Free Cash Flow in the second half of the year.”

OPERATIONAL UPDATE

• Production-Lonestar reported net oil and gas production of 11,855 BOE/d during the three months ended June 30, 2021, representing a 14% increase quarter-over-quarter. 2Q21 production volumes consisted of 6,224 barrels of oil per day (53%), 2,409 barrels of NGLs per day (20%), and 19,332 Mcf of natural gas per day (27%). Since year-end, Lonestar has placed onstream a three-well pad at Hawkeye (50% WI) and two two-well pads at Horned Frog (100% WI).
• Pricing-Lonestar’s Eagle Ford Shale assets continued to deliver favorable wellhead realizations in 2Q21. Lonestar’s wellhead crude oil price realization was $64.21/bbl, which reflects a discount of $2.10/bbl vs. West Texas Intermediate (“WTI”). Lonestar’s realized NGL price was $22.53/bbl, or 34% of WTI. Lonestar’s realized wellhead natural gas price was $2.68 per Mcf, reflecting a $0.26 discount to Henry Hub.
• Revenues-Wellhead revenues increased by $6.2 million to $46.0 million in 2Q21, or 16%, compared to 1Q21, primarily driven by a 15% increase in oil price realizations.
• Expenses-Total cash expenses, which include the cash portions of lease operating, gathering, processing, transportation, production taxes, general & administrative, and interest expenses were $18.2 million. 2Q21 cash operating costs increased by 10%, compared to $16.5 million in 1Q21, in conjunction with higher production volumes. When measured on a unit-of-production basis, total cash costs were reduced by 4% from $17.66 per BOE to $16.90 per BOE. Adjusted for non-recurring items discussed below, total cash expenses were $16.0 million, or $14.84 per BOE.
  • Lease Operating Expenses (“LOE”), which includes workover expenses, showed improvement on an absolute dollar basis and a per-unit basis. Lease operating expenses were $3.9 million for 2Q21, which was 12% lower than LOE of $4.4 million in 1Q21. Moreover, LOE per BOE was reduced by 23%, from $4.76 per BOE in 1Q21 to $3.65 per BOE in 2Q21.
  • Gathering, Processing & Transportation Expenses (“GP&T”) for 2Q21 were $1.5 million, which remained stable when compared to GP&T of $1.5 million in the three months ended 1Q21. On a unit-of-production basis, GP&T decreased 15% quarter over quarter from $1.65 per BOE in 1Q21 to $1.41 per BOE in 2Q21.
  • Production & Ad Valorem Taxes for 2Q21 were $2.5 million, which was relatively flat compared to production taxes of $2.4 million in 1Q21. On a unit-of-production basis, production and ad valorem taxes decreased 11% quarter over quarter $2.59 per BOE in 1Q21 to $2.31 per BOE in 2Q21.
  • General & Administrative ("G&A") expenses were $5.9 million, or $5.53 per BOE in 2Q21 compared to $3.97 million, or $4.26 per BOE in 1Q21. Adjusted for non-recurring expenses such as severance costs and stock-based compensation G&A for 2Q21 was $3.4 million, or $3.18 per BOE.
  • Interest Expense was $4.3 million for 2Q21, up 5% from $4.1 million in 1Q21. On a unit-of-production basis, interest expense was reduced from $4.40 per BOE in 1Q21 to $4.01 per BOE in 1Q21. Lonestar expects continued reductions in interest expense per BOE, as the Company reduces long-term debt and increases production.

EAGLE FORD SHALE TREND - WESTERN REGION

In our Western Region, which encompasses Dimmit and LaSalle Counties, production for 2Q21 averaged approximately 6,604 BOE per day, a 29% increase from 1Q21 production. Production consisted of 2,550 barrels of oil per day (39%), 1,607 barrels of NGL’s per day (24%) and 14,668 Mcf of natural gas per day (37%). The Western region accounted for 56% of the Company’s production during the quarter.

Lonestar recently completed drilling operations on 2.0 gross / 2.0 net wells on its Horned Frog South property, Lonestar has a 100% WI / 77.96% NRI in the Horned Frog Alderman #1H and #2H. These wells commenced flowback in June, and to date, have registered max 30-day production rates averaging 2,306 BOE/d. Production is currently comprised of 59% crude oil and NGL’s on an equivalent basis.

• Horned Frog Alderman A #1H – With a 11,883’ perforated interval, the #1H recorded max 30-day rates of 825 Bbls/d oil, 516 Bbls/d of NGLs, and 5,526 Mcf/d, or 2,262 BOE/d on a three-stream basis.

• Horned Frog Alderman B #2H – With a 12,141’ perforated interval, the #2H recorded max 30-day rates of 815 Bbls/d oil, 551 Bbls/d of NGLs, and 5,903 Mcf/d, or 2,350 BOE/d on a three-stream basis.

EAGLE FORD SHALE TREND - CENTRAL REGION

In our Central Region, which principally includes Gonzales, Karnes, Lavaca and Fayette Counties, 2Q21 production averaged approximately 4,991 BOE/d, a slight decrease over 1Q21 rates. Production consisted of 3,536 barrels of oil per day (71%), 733 barrels of NGL’s per day (15%), and 4,330 Mcf of natural gas per day (14%). The Central region accounted for 42% of the Company’s production during the quarter.

As part of its Joint Venture with Marathon Oil Corporation, Lonestar, as operator, has permitted a three-well pad on its Hawkeye asset. To date, Lonestar has completed drilling operations on three wells, the Hawkeye #9H, #10H and #11H, with designed perforated intervals exceeding 11,000 feet.

EAGLE FORD SHALE TREND - EASTERN REGION

In our Eastern Region, 1Q22 production averaged approximately 260 BOE/d, a 10% increase over 1Q21 rates. Production consisted of 138 barrels of oil per day (53%), 67 barrels of NGL’s per day (26%), and 334 Mcf of natural gas per day (21%).

ABOUT LONESTAR RESOURCES US INC.

Lonestar is an independent oil and natural gas company based in Fort Worth, Texas, focused on the development, production, and acquisition of unconventional oil, NGLs, and natural gas properties in the Eagle Ford Shale in Texas, where we have accumulated approximately 72,569 gross (52,565 net) acres in what we believe to be the formation’s crude oil and condensate windows, as of June 30, 2021. For more information, please visit www.lonestarresources.com.

CAUTIONARY & FORWARD-LOOKING STATEMENTS

Cautionary Note Regarding Forward Looking Statements

Disclosures in this press release contain certain forward-looking statements within the meaning of the federal securities laws. Statements that do not relate strictly to historical or current facts are forward-looking. These statements contain words such as “possible,” “if,” “will,” “expect” and “assuming” and involve risks and uncertainties including, among others that our business plans may change as circumstances warrant and securities of the Company may not ultimately be offered to the public because of general market conditions or other factors. Accordingly, readers should not place undue reliance on forward-looking statements as a prediction of actual results. For more information concerning factors that could cause actual results to differ materially from those conveyed in the forward-looking statements, please refer to the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2021 and any subsequently filed quarterly reports on Form 10-Q. Any forward-looking statements in this press release are made as of the date of this press release and the Company undertakes no obligation to update or revise such forward-looking statements to reflect events or circumstances that occur, or of which the Company becomes aware, after the date hereof, unless required by law.

(Unaudited Financial Statements to Follow)

*References to “Successor” refer to the new Lonestar reporting entity after the Company’s emergence from bankruptcy on November 30, 2020, and references to “Predecessor” refer to the Lonestar entity prior to emergence from bankruptcy.*

NON-GAAP FINANCIAL MEASURES (Unaudited)

Reconciliation of Non-GAAP Financial Measures

Adjusted EBITDAX

Adjusted EBITDAX is not a measure of net income as determined by GAAP. Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by management and external users of the Company’s consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted EBITDAX as net (loss) income attributable to common stockholders before depreciation, depletion, amortization and accretion, exploration costs, non-recurring costs, loss (gain) on sales of oil and natural gas properties, impairment of oil and gas properties, stock-based compensation, interest expense, income tax (benefit) expense, rig standby expense, other income (expense), unrealized (gain) loss on derivative financial instruments and unrealized (gain) loss on warrants.

Management believes Adjusted EBITDAX provides useful information to investors because it assists investors in the evaluation of the Company’s operating performance and comparison of the results of the Company’s operations from period to period without regard to its financing methods or capital structure. The Company excludes the items listed above from net (loss) income attributable to common stockholders in arriving at Adjusted EBITDAX to eliminate the impact of certain non-cash items or because these amounts can vary substantially from company to company within its industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDAX should not be considered as an alternative to, or more meaningful than, net (loss) income attributable to common stockholders as determined in accordance with GAAP. Certain items excluded from Adjusted EBITDAX are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDAX. The Company’s computations of Adjusted EBITDAX may not be comparable to other similarly titled measures of other companies.

The following table presents a reconciliation of Adjusted EBITDAX to the GAAP financial measure of net loss attributable to common stockholders for each of the periods indicated.

Adjusted Net Income (Loss)

Adjusted net (loss) income comparable to analysts’ estimates as set forth in this release represents income or loss before income taxes adjusted for certain non-cash items (detailed in the accompanying table) less income taxes. We believe adjusted net (loss) income is calculated on the same basis as analysts’ estimates and that many investors use this published research in making investment decisions and evaluating operational trends of the Company and its performance relative to other oil and gas producing companies.

The following table presents a reconciliation of Adjusted Net (Loss) Income to the GAAP financial measure of net loss before taxes for each of the periods indicated.

Discretionary Fee Cash Flow (“DCF”)

Discretionary cash flow is defined as net cash provided by operating activities before changes in operating assets and liabilities. Management believes that the non-US GAAP measure of discretionary cash flow is useful as an indicator of an oil and natural gas exploration and production company's ability to internally fund exploration and development activities and to service or incur additional debt. The company has also included this information because changes in operating assets and liabilities relate to the timing of cash receipts and disbursements which the company may not control and may not relate to the period in which the operating activities occurred. Operating cash flow should not be considered in isolation or as a substitute for net cash provided by operating activities prepared in accordance with US GAAP.